House of Representatives

Temporary Residents' Superannuation Legislation Amendment Bill 2008

Superannuation (Departing Australia Superannuation Payments Tax) Amendment Bill 2008

Explanatory Memorandum

Circulated By the Authority of the Treasurer, the Hon Wayne Swan Mp

Chapter 1

Payment of unclaimed superannuation to the Commissioner of Taxation

Outline of chapter

1.1 Part 1 of Schedule 1 to the Temporary Residents' Superannuation Legislation Amendment Bill 2008 (main Bill) amends the Superannuation (Unclaimed Money and Lost Members) Act 1999 (S(UMLM) Act) to implement the Government's temporary residents' superannuation measure, including by inserting Part 3A into the S(UMLM) Act.

1.2 This chapter outlines how the rules in Part 3A require superannuation providers to pay the unclaimed superannuation of departed temporary visa holders to the Commissioner of Taxation (Commissioner). This chapter also defines key concepts used in Part 3A.

1.3 All references to legislative provisions in this chapter are references to the main Bill unless otherwise stated.

Context of amendments

1.4 A superannuation provider of a fund holds unclaimed superannuation for a person if the person has a superannuation interest in the fund and at least six months have passed since they held a temporary visa that ceased to be in effect and left Australia. Under the S(UMLM) Act these amounts may become payable to the Commissioner.

1.5 Part 3A of the S(UMLM) Act contains rules which require the Commissioner to give superannuation providers a notice in certain circumstances, and for providers who receive such notices to give a statement and to pay an amount to the Commissioner by a specified time.

Summary of new law

Key concepts

1.6 For the purposes of Part 3A of the S(UMLM) Act, several new concepts are inserted into the definition provision at section 8.

Notices to superannuation providers

1.7 Under Part 3A of the S(UMLM) Act, the Commissioner must give a superannuation provider for a fund a written notice identifying a person or persons where certain circumstances exist. These circumstances include the person(s) identified being a departed temporary visa holder with a superannuation interest in the fund.

1.8 No notice is required to be given to providers of state or territory public sector superannuation schemes or to providers of unfunded public sector superannuation schemes.

Statement from superannuation providers

1.9 A superannuation provider that receives a notice from the Commissioner must give the Commissioner a statement in the approved form and with the required information, by a specified time. This requirement applies equally to providers of defined benefit funds and providers of accumulation funds.

Payment by superannuation providers

1.10 Broadly speaking, a superannuation provider that receives a notice from the Commissioner must pay to the Commissioner the difference between:

·
the amount that would have been payable from the fund to a person identified in the notice had that person requested payment in connection with their departure (the notional departing Australia superannuation payment (DASP)); and
·
the total of amounts paid or payable from the fund in respect of the person.

The difference (if any) must be paid to the Commissioner by the required time or the provider accrues general interest charge on the unpaid amount and commits an offence.

1.11 This requirement applies equally to providers of defined benefit funds and providers of accumulation funds.

Comparison of key features of new law and current law

New law Current law
The superannuation of a departed temporary visa holder, who does not take their benefits with them upon departure as a DASP, could be paid to the Commissioner as unclaimed superannuation. The departed temporary visa holder can later claim back the amount from the Commissioner. The superannuation of a departed temporary visa holder that does not take their benefits with them upon departure as a DASP remains in the fund until it is claimed or becomes payable to the Commissioner as unclaimed money (eg, reached age 65, no contributions received and no contact). The departed temporary visa holder can later claim the amount back from the Commissioner.

Detailed explanation of new law

Key concepts

1.12 For the purposes of administering the rules in Part 3A of the S(UMLM) Act, the following concepts are inserted into the definition provision at section 8 of the S(UMLM) Act:

·
Approved form has the meaning given by section 388-50 in Schedule 1 to the Taxation Administration Act 1953 (TAA 1953) [ Schedule 1, item 5 ]. The offence provisions and administrative penalties under the TAA 1953 for giving false or misleading information in the approved form and for failing to give the approved form by the required time, apply with respect to all approved forms under the S(UMLM) Act (ie, to Part 3A as well as to section 16).
·
Engage in conduct means to do an act or to omit to perform an act [ Schedule 1, item 6 ]. This definition is relevant for the purpose of the offence provision that applies if an amount is not paid to the Commissioner by the day it is due and payable [ Schedule 1, item 16, subsection 20F(6 )].
·
General interest charge means the charge worked out under Part IIA of the TAA 1953 [ Schedule 1, item 7 ].
·
Leave Australia (and left Australia ) has the same meaning as under the Migration Act 1958 [ Schedule 1, item 8 ].
·
Legal personal representative of a person who has died is an executor or administrator of the person's estate [ Schedule 1, item 9 ].
·
Scheduled statement day is defined as the day specified by the Commissioner by legislative instrument, by the end of which a statement must be given by a superannuation provider to the Commissioner if required to do so under Part 3A of the S(UMLM) Act [ Schedule 1, items 10 and 16, section 20B ].
·
Superannuation interest means an interest in a superannuation fund, an approved deposit fund or a retirement savings account (RSA) [ Schedule 1, item 11 ]. 'Approved deposit fund', 'RSA' and 'superannuation fund' are defined under section 8.
·
Terminal medical condition has the same meaning as under the Income Tax Assessment Act 1997 (ITAA 1997) [ Schedule 1, item 12 ].

Notices to superannuation providers

1.13 Part 3A of the S(UMLM) Act requires the Commissioner to give a written notice (section 20C notice) to a superannuation provider for a fund identifying a person, if the Commissioner is satisfied that all of the following circumstances exist:

·
there are reasonable grounds to believe that the person has a superannuation interest in the fund;
·
the person was previously a holder of a temporary visa, other than a visa prescribed by the Superannuation (Unclaimed Money and Lost Members) Regulations 1999 (Regulations), that has ceased to be in effect;
·
the person left Australia after starting to be the holder of the visa;
·
at least six continuous months have passed since the visa ceased to be in effect and the person left Australia; and
·
the person:

-
is not a holder of a temporary visa or permanent visa;
-
is not an Australian citizen or New Zealand citizen; and
-
has not made a valid application for a permanent visa that has not been finally determined under the Migration Act 1958 .

[ Schedule 1, item 16, subsection 20C(1 )]

In general terms, the effect of a provider receiving a notice from the Commissioner under section 20C of the S(UMLM) Act is the requirement to give a statement and make a payment to the Commissioner by a certain time (refer to paragraphs 1.28 and 1.35).

1.14 Regulations could be made to prescribe certain temporary visa holders who must not be identified in a section 20C notice that is given to a provider [ Schedule 1, item 16, subparagraph 20C(1 )( b )( i )]. This reduces the range of temporary visa holders whose unclaimed superannuation is required to be paid to the Commissioner. Prescribing 'excluded' temporary visa holders in the Regulations allows flexibility, for example to respond to changing circumstances (ie, if a new temporary visa class is created) and to cater appropriately for any specific visa classes.

1.15 The Commissioner is not required to give a notice under section 20C of the S(UMLM) Act (even where all the circumstances in paragraph 1.13 exist) to a superannuation provider that is either:

·
the trustee of a state or territory public sector superannuation scheme within the meaning of section 18 of the S(UMLM) Act; or
·
the trustee of an unfunded public sector scheme as defined in the Superannuation Guarantee (Administration) Act 1992 .

[ Schedule 1, item 16, subsection 20C(3 )]

1.16 Where the Commissioner is required to give a notice under section 20C of the S(UMLM) Act to a provider in respect of a person, the notice must identify the person and must include information prescribed by the Regulations [ Schedule 1, item 16, subsection 20C(2 )]. The notice may contain the tax file number of the person and of the fund [ Schedule 1, item 16, section 25A ]. Where the notice contains the tax file number of the person, it is taken to be quoted (for superannuation purposes) under section 295-615 of the ITAA 1997.

1.17 A notice given by the Commissioner under section 20C of the S(UMLM) Act is not a legislative instrument under section 5 of the Legislative Instruments Act 2003 as it does not have a legislative character which determines or alters the content of the law; it is merely declaratory of the law and causes the law to be applied. [ Schedule 1, item 16, subsection 20C(5 )]

1.18 While the Commissioner is not allowed to amend a notice under section 20C of the S(UMLM) Act given to a provider, the Commissioner is, however, required to revoke the notice where certain conditions have been met (refer to paragraph 1.20). [ Schedule 1, item 16, subsection 20C(4 ) and section 20J ]

1.19 A superannuation provider or person who is dissatisfied with a section 20C notice can make an objection under Part IVC of the TAA 1953. [ Schedule 1, item 16, section 20P ]

Revoking a notice

1.20 The Commissioner must revoke a notice given under section 20C of the S(UMLM) Act to a superannuation provider, if the Commissioner is satisfied that:

·
a notice should never have been given to the provider in respect of a person (ie, the circumstances for giving the notice did not exist in the first place); or
·
the circumstances relating to a person have changed since the time the notice was given (ie, the circumstances for giving the notice no longer exist).

[ Schedule 1, item 16, subsection 20J(1 )]

1.21 For instance, the Commissioner is required to revoke a notice if satisfied that:

·
there were no, or there are no longer, reasonable grounds for believing that the person identified in the notice has a superannuation interest in the provider's fund; or
·
where there are reasonable grounds for believing that the person identified in the notice has a superannuation interest in the fund, that:

-
the person has never held a temporary visa;
-
if the person has held a temporary visa, then the visa is one that is prescribed by the Regulations or the visa has never ceased to be in effect;
-
if the person has held a temporary visa (but is not one prescribed in the Regulations) and it has ceased to be in effect, the person has not left Australia;
-
if the person has held a temporary visa that has ceased to be in effect and the person has left Australia, a period of at least six continuous months has not passed since the later of those two events;
-
the person is an Australian or New Zealand citizen; or
-
the person is the holder of a temporary visa or permanent visa, or has made a valid application for a permanent visa that has not been finally determined under the Migration Act 1958 .

[ Schedule 1, item 16, subsection 20C(1 )]

1.22 The revocation must be in the form of a written notice given by the Commissioner to the provider [ Schedule 1, item 16, subsection 20J(2 )]. The revocation notice is not a legislative instrument under item 33 of Part 1 of Schedule 1 to the Legislative Instruments Act 2003 .

1.23 If the Commissioner revokes an earlier notice, then the effect of the revocation is that the earlier notice is taken to have never been given [ Schedule 1, item 16, subsection 20J(3 )]. Accordingly, where the Commissioner does revoke an earlier notice, the provider is not required to give a statement nor make a payment to the Commissioner under Part 3A of the S(UMLM) Act in connection with that earlier revoked notice.

1.24 However, a revocation by the Commissioner has no effect where at least one of the following conditions exists [ Schedule 1, item 16, subsection 20J(4 )]:

·
before the revocation, the provider has already made a payment to the Commissioner because of the earlier notice [ Schedule 1, item 16, subsection 20J(5 )]; or
·
the revocation was made less than 28 days before the required time for the provider to give a statement to the Commissioner ('scheduled statement day'), and before the end of that day the provider has either given a statement or made a payment to the Commissioner because of the earlier notice [ Schedule 1, item 16, subsection 20J(6 )].

For both above conditions, an amount that has been paid to the Commissioner can later be claimed back (refer to Chapter 2). The second condition exists to allow providers who have already commenced processes to respond to the Commissioner's earlier notice, to continue with their processing.

1.25 If a provider receives a revocation notice less than 28 days before the scheduled statement day, and before that day the provider has given a statement or made a payment because of a notice under section 20C of the S(UMLM) Act, then the revocation has no effect [ Schedule 1, item 16, subsection 20J(6 )]. That is, the section 20C notice is not taken to have never been given, that notice stands and the statement or payment has been given because of a section 20C notice. The provider is discharged from any further liability in respect of the amount paid [ Schedule 1, item 16, section 20G ]. A payment made in connection with a section 20C notice can later be claimed back (refer to Chapter 2).

1.26 However, a section 20C notice that is revoked by the Commissioner 28 days or more before the scheduled statement day and prior to payment being made by the provider because of that notice, has the effect that the notice was never given to the provider [ Schedule 1, item 16, subsections 20J(3 ) and ( 6 )]. Accordingly, a superannuation provider that gives a statement and/or makes a payment after the revocation, purportedly because of a notice under section 20C of the S(UMLM) Act, cannot rely on the notice for giving the statement and is not discharged from any liability because of the payment.

1.27 Where the revocation of an earlier notice would not have effect (refer to paragraph 1.24), the Commissioner is not required to revoke that earlier notice. [ Schedule 1, item 16, subsections 20J(4 ) and ( 7 )]

Example 1.1 The Commissioner issues a notice under section 20C of the S(UMLM) Act to a superannuation provider in respect of member Catherine. Assume that the next scheduled statement day after the notice is given is 1 May in a year. The Commissioner revokes the earlier notice on 1 March of that year after being satisfied the circumstances for giving that notice no longer exist. The revocation has the effect that the earlier notice is taken to never have been given. Any subsequent payment by the provider because of the earlier notice does not discharge the provider of any liability in respect to that payment because the earlier notice has been revoked (and therefore taken to never have been given). The amount paid can be later claimed back by Catherine.Assume instead the Commissioner revokes the earlier notice on 10 April in that year (which is less than 28 days before the scheduled statement day). If the provider makes a payment because of the earlier notice by 1 May in that same year (assuming the amount paid was properly worked out and paid in full), the revocation is taken to have no effect and the provider is discharged from further liability in respect to the amount paid. The amount paid can be later claimed back by Catherine.

Superannuation providers to give statements to the Commissioner

1.28 A superannuation provider that receives a notice under section 20C of the S(UMLM) Act from the Commissioner which has not been revoked, must give to the Commissioner a statement in the approved form and by the required time [ Schedule 1, item 16, sections 20D and 20E ]. The statement must be given to the Commissioner by the end of the next scheduled statement day after the notice which the statement relates to was given [ Schedule 1, item 16, paragraph 20E(2 )( a )].

1.29 However, if a notice under section 20C of the S(UMLM) Act is given to a provider less than 28 days before the next scheduled statement day after the notice was given, the provider is required to give the statement to the Commissioner by the end of the following scheduled statement day. [ Schedule 1, item 16, paragraph 20E(2 )( b )]

Example 1.2 Assume the scheduled statement days in each year are 1 May and 1 November. If a notice under section 20C of the S(UMLM) Act was given by the Commissioner to a superannuation provider on 1 April in a year, the provider is required to give the Commissioner a statement in the approved form by the end of 1 May that year.However, if the notice had been given by the Commissioner to the provider on 10 April in a year, the provider is required to give the statement in the approved form to the Commissioner by the end of 1 November that year.

1.30 The Commissioner may defer the time by which a statement is required to be given by a provider, under section 388-55 in Schedule 1 to the TAA 1953. A provider that fails to give the statement by the required time commits an offence under section 8C of the TAA 1953, and could be subject to an administrative penalty under Division 286 in Schedule 1 to the TAA 1953.

1.31 A provider that receives a notice under section 20C of the S(UMLM) Act from the Commissioner which has not been revoked, is required to give a statement in the approved form to the Commissioner by the required time even where:

·
the person identified in the notice does not have a superannuation interest in the fund at the time the statement is required to be given; or
·
there is no amount payable to the Commissioner by the provider in respect of the person (refer to paragraph 1.35).

[ Schedule 1, item 16, subsection 20E(3 )]

1.32 The provider must give the required information in the statement in the approved form. The nature of the required information must be relevant to the superannuation interest in the fund of the person identified in the notice and/or to the administration of Part 3A of the S(UMLM) Act and related tax legislation [ Schedule 1, item 16, subsection 20E(1 )]. This facilitates, amongst other things, the collection of information on the taxation components of amounts paid to the Commissioner, for the purpose of making payments when the amounts are later claimed from the Commissioner.

1.33 The approved form may require the statement to contain the tax file number of the fund, of the superannuation provider and of the person identified in the notice (if the person has quoted it to the provider or it is in the notice) [ Schedule 1, item 16, subsection 25(2A )]. A notice that contains the tax file number of a person is taken to be quoted to the provider for superannuation purposes under section 295-615 of the ITAA 1997.

1.34 A provider that supplies false or misleading information in the statement commits an offence under sections 8K and 8N of the TAA 1953, and could be subject to an administrative penalty under Division 284 in Schedule 1 to the TAA 1953.

Superannuation providers to make payments to the Commissioner

1.35 Under Part 3A of the S(UMLM) Act, a superannuation provider that receives a section 20C notice from the Commissioner which has not been revoked could be required to pay an amount to the Commissioner in respect of a person identified in the notice [ Schedule 1, item 16, section 20D ]. The amount payable (if any) by the provider to the Commissioner is the difference between the starting amount , and the total of the amounts that have already been paid or are payable by the provider in respect of the person [ Schedule 1, item 16, subsection 20F(1 )].

The starting amount

1.36 The starting amount is the amount that would have been payable from the fund to the person identified in the notice under section 20C of the S(UMLM) Act, if the person could and had requested payment in connection with their departure from Australia (as a DASP). [ Schedule 1, item 16, subsection 20F(2 )]

1.37 The starting amount is a hypothetical amount that would have been payable from the fund if a DASP was payable in respect of the person and a request for payment had been made. The starting amount is the net of any fees and charges that could be applied by the provider on a DASP amount.

1.38 The starting amount must be worked out at the time referred to as 'calculation time'. Calculation time is defined as being the time immediately before the required time for the provider to make a payment to the Commissioner because of the notice under section 20C of the S(UMLM) Act (assuming an amount is payable in respect of the person) [ Schedule 1, item 16, paragraph 20F(2 )( a )]. In other words, the calculation time can be:

·
the time that is immediately before the next scheduled statement day after the notice was given [ Schedule 1, item 16, subsection 20F(1 ) and paragraph 20F(2 )( a )];
·
if the notice is given less than 28 days before the next scheduled statement day, the time that is immediately before the following scheduled statement day [ Schedule 1, item 16, subsection 20F(1 ) and paragraph 20F(2 )( a )]; or
·
if the Commissioner has deferred the time the payment is due and payable (ie, deferred the next scheduled statement day or the following scheduled statement day), the time that is immediately before the deferred day [ Schedule 1, item 16, subsection 20F(1 ) and paragraph 20F(2 )( a )].

However, if the provider makes a payment before the required time the payment is due and payable, the calculation time is the time that is immediately before the payment is to be made [ Schedule 1, item 16, subparagraph 20F(2 )( a )( ii )].

1.39 If the provider has already paid an amount in respect of the person before the 'calculation time', then that amount paid is not included in the starting amount. This is because the amount already paid would not have been included in a DASP for the person at the calculation time.

1.40 In working out the starting amount the provider must assume a DASP request could be made and is made before the calculation time [ Schedule 1, item 16, paragraph 20F(2 )( b )] and that the person has not died [ Schedule 1, item 16, paragraph 20F(2 )( c )].

1.41 Further, when working out the starting amount, the provider must not notionally withhold the DASP tax that would otherwise apply. [ Schedule 1, item 16, paragraph 20F(4 )( a )]

Example 1.3 Assume a provider receives a notice under section 20C of the S(UMLM) Act from the Commissioner identifying Jay as a departed temporary visa holder. The provider is required to work out the notional DASP amount in respect of Jay (assuming Jay could make and has made a DASP request) at the time immediately before it makes the payment to the Commissioner. The notional DASP amount excludes amounts already paid by the provider in respect of Jay. The notional DASP tax should not be subtracted from the notional DASP amount, although this amount is net of fees and charges that would apply to the DASP.

Reduce the starting amount by amounts that are paid / payable in respect of the person

1.42 Broadly speaking, the provider must reduce the starting amount in respect of a person, by the total of any amounts that have already been paid or become payable in respect of the person. That is, the starting amount must be reduced by the total of the following amounts:

·
the amount (if any) that is payable by the provider in respect of the person where the provider is required or permitted to pay the amount under the Superannuation (Industry) Supervision Regulations 1994 (SIS Regulations) or Retirement Savings Accounts Regulations 1997 (RSA Regulations);
·
the amount (if any) paid by the provider because the person has actually died;
·
the amount (if any) of the person's superannuation interest that supports a superannuation income stream; and
·
the amount (if any) worked out under the Regulations.

[ Schedule 1, item 16, subsection 20F(3 )]

1.43 The time at which the provider must work out the above amounts is at the 'calculation time'. [ Schedule 1, item 16, subsection 20F(3 )]

Amount that is payable under the Superannuation Industry (Supervision) Regulations 1994 or the Retirement Savings Accounts Regulations 1997

1.44 The provider is required to subtract from the starting amount, an amount where:

·
the person has met a condition of release under the SIS Regulations or the RSA Regulations which requires (compulsory cashing) or permits (voluntary cashing) the amount to be paid in respect of the person; and
·
there is a requirement on the provider to pay that amount.

[ Schedule 1, item 16, paragraph 20F(3 )( a )]

1.45 For instance, if the person has met a compulsory cashing condition under the SIS Regulations or the RSA Regulations (eg, DASP) and the provider has received a request for payment, then there is a requirement on the provider to pay that amount. The starting amount is reduced by the amount that is payable.

1.46 Also, if the person has met a voluntary cashing condition under the SIS Regulations or the RSA Regulations, the provider has received a request for payment and the rules of the fund allow an amount to be paid in these circumstances, then there is a requirement on the provider to pay that amount. The starting amount is reduced by the amount that is payable.

1.47 Before the starting amount can be reduced by an amount, the provider must be more than merely aware that the person has met a condition of release under the SIS Regulations or the RSA Regulations, and there must be more than a mere option, in the circumstances, for the provider to pay the amount in respect of the person.

1.48 If, at the calculation time, a provider is in the process of making a payment in accordance with a condition of release under the SIS Regulations or the RSA Regulations in respect of the person, then the starting amount is reduced by the amount of the payment. In practice, the starting amount would only normally be reduced when the fund has been requested to make a payment that it is entitled to make under SIS Regulations or the RSA Regulations and the fund is in the process of making that payment.

Amounts paid because of death

1.49 When working out the starting amount, the provider is required to assume the person in question has not died before the calculation time [ Schedule 1, item 16, paragraph 20F(2 )( c )]. Accordingly, if the person has actually died before this time, the starting amount must be reduced by any amount paid by the provider because of the person's death [ Schedule 1, item 16, paragraph 20F(3 )( b )].

Amounts in the Regulations

1.50 Regulations could be made to specify other amounts that are to be reduced from the starting amount [ Schedule 1, item 16, paragraph 20F(3 )( d )]. Where other amounts are specified in the Regulations, this could result in the remaining amount that is payable (if any) to the Commissioner being less than the starting amount.

1.51 In working out how much of the starting amount is to be reduced, the provider must not notionally withhold the DASP tax that may otherwise apply [ Schedule 1, item 16, paragraph 20F(4 )( a )]. For instance, if the provider has received a DASP request from the person, then the starting amount is to be reduced by the gross DASP amount and not by the net DASP amount (after the DASP tax has been withheld).

Example 1.4 A provider of a regulated superannuation fund (that is not an unfunded public sector superannuation scheme) has received a DASP request in respect of Catherine (who has been identified in a section 20C notice). The starting amount for Catherine at the calculation time is $5,000. This is to be reduced by the amount that is required to be paid to Catherine in accordance with the SIS Regulations, without subtracting the notional DASP tax amount.

The remainder is the amount payable to the Commissioner

1.52 Where there is an amount remaining, after the starting amount for a person has been reduced by the total amount paid or payable (if any) in respect of the person, the provider must pay the remainder to the Commissioner. [ Schedule 1, item 16, subsection 20F(1 )]

1.53 The remaining amount must be paid to the Commissioner by the end of the next scheduled statement day after the notice under section 20C of the S(UMLM) Act was given to the provider [ Schedule 1, item 16, subsection 20F(1 )( a )]. However, if the notice was given to the provider less than 28 days before that day, the payment is due and payable to the Commissioner by the end of the following scheduled statement day [ Schedule 1, item 16, subsection 20F(1 ]( b )].

Example 1.5 Assume the scheduled statement days for each year are 1 May and 1 November. A superannuation provider works out that an amount is payable in respect of Jay who has been identified in a section 20C notice given to the provider on 25 September in a year. The provider is required to pay the amount by the end of 1 November of that year.However, if the notice was given by the Commissioner to the provider on 18 October in that year, the provider must pay the amount to the Commissioner by the end of 1 May of the following year.

1.54 The Commissioner can defer the time at which amounts are due and payable under section 255-10 in Schedule 1 to the TAA 1953.

1.55 A provider that fails to pay an amount that is payable to the Commissioner by the time required, is liable for a general interest charge on the unpaid amount [ Schedule 1, item 16, subsection 20F(5 )]. As well, the amount payable by a provider to the Commissioner is a tax-related liability under the TAA 1953 with the associated administrative penalties under Division 284 in Schedule 1 to the TAA 1953.

1.56 In addition, an offence is committed if, as a result of an act or omission, an amount that is payable (refer to paragraph 1.52) to the Commissioner is not paid by the required time [ Schedule 1, item 16, section 8 and subsection 20F(6 )]. Where the act or omission is engaged by an individual, the maximum penalty for the offence is 100 penalty units (and five times greater if the act or omission is engaged by a body corporate under the Crimes Act 1914 ).

1.57 In working out whether there is an amount payable to the Commissioner, in respect of a person where their superannuation interest is subject to a payment split under the Family Law Act 1975 , the provider can only take into account the person's entitlement to payment after the payment split. [ Schedule 1, item 16, paragraph 20F(4 )( b )]

1.58 A provider that pays the whole amount that is payable by the time required under Part 3A of the S(UMLM) Act is discharged from any further liability in respect to the amount paid. [ Schedule 1, item 16, section 20G ]

1.59 Where the revocation of a notice under section 20C of the S(UMLM) Act has effect (refer to paragraph 1.20), no amount becomes payable to the Commissioner in respect of the person identified in connection with the notice. [ Schedule 1, item 16, subsection 20J(3 )]

Refund of overpayments made by superannuation providers

1.60 If a superannuation provider has made a payment because of a notice under section 20C of the S(UMLM) Act in respect of a person, and the Commissioner is satisfied that the amount paid exceeded the amount that was payable (if any) in connection with the notice in respect to the person, then the Commissioner must pay the excess to the provider of the originating fund (or to the provider of the successor fund if the original fund no longer exists). [ Schedule 1, item 16, section 20K ]

1.61 For instance, if a provider has paid too much in respect of a person and the Commissioner is satisfied that the provider was not required to pay the excess amount in respect of the person (ie, the provider worked out the wrong amount that was payable), then the Commissioner must refund that excess to the provider.

1.62 Similarly, if the amount paid by a provider in respect of a person is not the person in fact identified in the notice (ie, the provider has made a payment in respect of the wrong person), then the Commissioner must refund that payment to the provider if satisfied the provider was not required to make a payment in respect of that person.

Example 1.6 A provider paid $150,000 in respect of member Catherine who was identified in a notice under section 20C of the S(UMLM) Act given by the Commissioner. However, the amount payable to the Commissioner in respect of Catherine was in fact only $100,000, and the Commissioner is satisfied that the provider was not required to pay the additional $50,000 in respect of Catherine, the Commissioner must pay the $50,000 to the provider (or to the provider of the successor fund if the original fund no longer exists).Assume a provider paid $150,000 in respect of member Lola to the Commissioner because of a section 20C notice. However, the notice in fact identified a different member of the fund, Lili. If the Commissioner is satisfied that the provider was not required to pay the $150,000 in respect of Lola, the Commissioner must pay the $150,000 to the provider (or the provider of the successor fund if the original fund no longer exists).

1.63 If a notice given under section 20C of the S(UMLM) Act wrongly identifies a person as someone that such a notice must be given in respect of, and the provider makes a payment to the Commissioner because of the notice, the Commissioner can refund that payment to the provider if the Commissioner is satisfied the person was someone in respect of who such notice should not have been given.

1.64 Money is appropriated under section 16 of the TAA 1953 to refund overpayments made to the Commissioner.

Application and transitional provisions

1.65 A notice from the Commissioner under section 20C of the S(UMLM) Act can identify a person who, before, on or after the commencement of Schedule 1 to the main Bill, has held a temporary visa (which is not a visa prescribed by the Regulations) that has ceased to be in effect and who has left Australia.

1.66 The requirements for a statement and a payment to be given by a provider to the Commissioner, apply from the commencement of Schedule 1 to the main Bill.


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